Quarterly Operational Update Three months ended 31 December 2015 QUARTERLY HIGHLIGHTS
98
GEOTHERMAL AVAILABILITY led to the highest geothermal generation for a quarter in the Company’s history
10 INCREASE IN HYDRO GENERATION
despite weak inflows
2
INCREASE IN LWAP/GWAP reflecting a reduction in relative hydro yields due to muted wholesale price volatility
COMMENTARY
GEOTHERMAL AND HYDRO GENERATION UP; WHOLESALE PRICES DOWN
The quarter to 31 December 2015 reflected strong geothermal performance as Mighty River Power had its highest-ever quarter of geothermal generation, up 12% on the prior comparable period (pcp), to 728GWh. This high geothermal generation reflected 98% availability of the Company’s geothermal plants during the quarter. The period also saw a 10% lift in hydro generation, up 81GWh on pcp to 907GWh. The wet winter turned into a dry spring in the catchment with quarterly inflows being the seventh lowest based on history since 1927. The quarter ended with storage in Lake Taupo of 387GWh, 67% full and 89% of average. National hydro storage was above average for most of the quarter, leading to lower wholesale electricity prices. The price the Company received for generation was down 13% on pcp to $67.91/MWh. Relative hydro yields (GWAP) also fell versus pcp contributing to an increase in LWAP/GWAP by 2% to 1.03. This was due to a flatter generation profile in response to lower wholesale price volatility. There was a significant decrease in thermal generation for the period as the Company prepared its Southdown station for closure on 31 December 2015. Mighty River Power’s electricity generation is now 100% renewable. NATIONAL DEMAND GROWTH CONTINUES - RECORD FOR Q2; ASX PRICES LIFT
National demand for electricity rose to the highest level for Q2 on record, up 0.9% compared with the same period last year (adjusted for temperature). This is the sixth consecutive quarter where demand has increased on pcp, with a reduction in demand from urban centres being more than off-set by increases across dairy, irrigation, industrial and rural centres. Throughout the quarter, ASX futures prices increased for each year from FY16 to FY18. This continuation of an upward trend increases the attractiveness of commercial yields, which tend to track the ASX futures. ENERGY PRICES DOWN 1.5%; VOLUMES DOWN 7%
A reduction in overall customer sales volumes reflects the highly competitive market across both residential and commercial. The average electricity price to customers was $110.94/MWh, lower than pcp. This was due to additional discounted offers to customers and Mighty River Power absorbing increases in lines and transmission costs for its customers on fixed-price contracts. Mighty River Power will release its financial results for the six months ended 31 December 2015 on 23 February 2016 MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
01
OPERATING STATISTICS
Three months ended 31 December 2015
Operating Information Electricity Sales FPVV sales to customers
VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
110.94
1,000
112.68
1,077
115.56
2,253
117.31
2,409
Spot customer purchases 70.23
554
570
1,340
1,338
446
506
913
1,070
1,056
1,134
2,380
2,532
233
359
520
719
1,289
78.76
1,493
380
385
North Island Customers
344
350
South Island Customers
36
35
Electricity Customers (000’s)
Dual Fuel Customers
41
Contracts for Difference Buy CfD
Volume (GWh) 469
458
Sell CfD
843
893
End User CfD
415
353
Net Sell CfD2
374
435
Gas Geothermal (consolidated)
3
Geothermal (equity accounted) Total
4
63.27
2,900
73.05
3,251
41 Volume (GWh)
Hydro
Six months ended 31 December 2014
Volume (GWh)
FPVV purchases from market
Electricity Generation
Six months ended 31 December 2015
VWAP1 ($/MWh)
FPVV sales to residential customers FPVV sales to business customers
Total NZEM Purchases
Three months ended 31 December 2014
Volume (GWh)
Volume (GWh)
929
894
1,919
1,739
746
844
990
846
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
VWAP ($/MWh)
Volume (GWh)
69.36
907
79.51
826
61.41
2,215
75.82
1,755
76.74
46
82.69
138
68.62
146
76.60
294
65.48
669
74.28
593
58.93
1,299
67.65
1,237
66.27
59
74.18
55
59.40
118
67.97
116
67.91
1,681
77.67
1,612
60.78
3,778
72.65
3,404
1.03
LWAP/GWAP Gas Purchases
$/GJ 5
1.01 PJ
$/GJ
1.04 PJ
1.01
$/GJ
PJ
$/GJ
PJ
Retail purchases
9.14
0.20
9.16
0.21
9.19
0.61
9.21
0.61
Generation purchases Carbon Emissions (‘000 tonnes CO2e)
3.17
0.546
5.74
1.37
6.216
1.70
6.93
2.79
Metrix AMI Meters (‘000)7
99
128
249
294
389
359
389
359
1.
VWAP is volume weighted average energy only price sold to FPVV customers after lines, metering and fees
2.
Includes Virtual Asset Swap volumes in both Buy and Sell CfD volumes of 176GWh for the 3 months ended 31 December 2015 and 176GWh for the 3 months ended 31 December 2014 and of 352GWh for the 6 months ended 31 December 2015 and 352GWh for the 6 months ended 31 December 2014
3.
Includes Mighty River Power’s 65% share of Nga Awa Purua generation
4.
Tuaropaki Power Company (Mokai) equity share
5.
Prices exclude fixed transmission charges
6.
Includes the virtual peaker operation of 33GWh for the 3 months ended 31 December 2015 and 44GWh for the 3 months ended 31 December 2014
7.
Prior period numbers have been revised relative to prior disclosures to rectify a counting error
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
02
MARKET DATA
ELECTRICITY GENERATION BY COMPANY FOR THE SIX MONTHS ENDED 31 DECEMBER Mighty River Power Meridian Energy Contact Energy Genesis Energy TrustPower Other
16%
33%
23%
16%
6%
6%
5%
6%
Financial Year HY2015
18%
33%
22%
16%
Financial Year HY2016
Source: Electricity Authority
SHARE OF ELECTRICITY SALES (GWh) FOR THE SIX MONTHS ENDED 31 DECEMBER
Mighty River Power Other
16%
84%
Financial Year HY2015
14%
86%
Financial Year HY2016
Source: Mighty River Power Purchases and Transpower SCADA
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
03
OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS Storage national average
FY 2016
FY 2015
Rolling 12 month average OTA price
4000
80
3500 3000
75
2000
70
$/MWh
GWh
2500
1500 1000
65
500 0
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
60
TAUPO STORAGE Average since 1999
FY 2016
FY 2015
600
500
GWh
400
300
200
100
0
Jul
Aug
Sep
Oct
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
04
OTAHUHU ASX FUTURES SETTLEMENT PRICE As at 31 December 2014 As at 30 June 2015 As at 30 September 2015 As at 31 December 2015 100 90 80
$77.66 $65.21
$/MWh
70
$68.53
$73.07
$76.73 $76.03 $78.31
$80.08
$75.93 $73.93
$81.16
$78.05 $80.06
60 50 40 30 20 10 0
FY16
FY17
FY18
FY19
Financial Year
BENMORE ASX FUTURES SETTLEMENT PRICE As at 31 December 2014 As at 30 June 2015 As at 30 September 2015 As at 31 December 2015 100 90 80
$75.50
$74.13
70
$/MWh
60
$64.68
$68.51
$75.51 $76.05 $69.33
$71.83
$76.10
$74.55 $75.64 $66.95
$59.00
50 40 30 20 10 0
FY16
FY17
FY18
FY19
Financial Year
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
05
NATIONAL CONSUMPTION Tiwai Point Aluminium Smelter consumption
National consumption
12,000
9,803
9,566
9,594
9,568
9,802
9,874
8,458
8,199
8,363
8,299
8,550
8,609
10,000
GWh
8,000 6,000 4,000 2,000 0
1,345
1,367
1,231
1,269
1,252
1,265
Q2 11
Q2 12
Q2 13
Q2 14
Q2 15
Q2 16
Financial Year Source: Transpower Information Exchange
NATIONAL CLIMATE SUMMARY
Financial Year
Q1
Q2
Q3
Q4
2016
11.4° C
16.0° C
n/a
n/a
2015
11.9° C
15.9° C
19.9° C
14.3° C
2014
12.3° C
16.7° C
18.9° C
14.8° C
2013
12.3° C
16.5° C
19.6° C
14.4° C
2012
11.5° C
16.6° C
18.9° C
14.0° C
Historical Average (since 1999)
11.9° C
16.1° C
19.4° C
14.2° C
Source: NIWA, Met Service
MONTHLY TOTAL CONSUMER RETAIL SWITCHING (ICPS)
25%
40,000
20%
30,000
15%
20,000
10%
10,000
5%
0
0%
Jul 15
Jan 15
Jul 14
Jan 14
Jul 13
Jan 13
Jul 12
Jan 12
Jul 11
Jan 11
Jul 10
Jan 10
Jul 09
Jan 09
Jul 08
Jan 08
Jul 07
ICPs
50,000
% Churn
NZ Market Churn Annual NZ Market Churn %
Source: Electricity Authority
MIGHTY RIVER POWER QUARTERLY OPERATIONAL UPDATE
06